The Good, the Bad, and the Ugly of State Sales Tax Systems
Note that this is the newest in my series of "real-world" small business issues. Other posts in this series include Buying a Small Business and Working with the Department of Labor
One of the things I did not mention in my series on buying a small business was the notion of complexity. Our business manages over 175 sites with 500 seasonal employees in 10 states. I have friends who own businesses that have the same sales, and more profit, from working alone from their home. As I often tell people, I love what I do, working in recreation and spending most of my time in National and State Parks, but it is overly complex for the money we make.
The one advantage of this is that, despite being a small business, I get to observe business practices in many parts of the country. And one business-related practice that varies tremendously from state to state is sales taxes. (By the way, before I bought this business, I was a strong Federalist. Putting most regulatory power in the states slows government encroachment. It also limits anti-business regulation, because states know that such unilateral regulation will just chase employment across state lines, as California has found out. However, having to deal with 10 different tax and regulatory regimes every day is causing me to revisit Federalism a bit).
Anyway, based on this experience, I will dedicate the rest of this post to my observations of the good and bad of state sales tax systems.
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